Cook Farm Supply Company manufactures and sells a pesticide
called Snare. The following data are available for preparing budgets for Snare
for the first 2 quarters of 2020.
1.
Sales: quarter
1, 29,200 bags; quarter 2, 42,200 bags.
Selling price is $ 63 per bag.
2.
Direct materials:
each bag of Snare requires 5 pounds of Gumm at a cost of
$ 3.80 per pound and 6 pounds of Tarr at $ 1.50 per
pound.
3.
Desired inventory
levels:
Type of Inventory
January
1
April
1
July
1
Snare (bags)
8,200
12,200
18,400
Gumm (pounds)
9,300
10,300
13,200
Tarr (pounds)
14,500
20,300
25,300
4.
Direct labor: direct
labor time is 15 minutes per bag at an hourly rate of $ 16 per
hour.
5.
Selling and
administrative expenses are expected to be 15% of sales plus $ 179,000 per
quarter.
6.
Interest expense is
$100,000.
7.
Income taxes are
expected to be 30% of income before income taxes.
Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $ 303,000 in quarter 1 and $ 426,500 in quarter 2.
(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
*PLEASE LOOK AT ALL PICTURES THAT ARE ATTACHED THESE ARE THE 2 BUDGETS THAT YOU NEED TO COMPLETE AND LOOKING AT EACH PICTURE IT HAS A DROP DOWN SO YOU WILL PICK ONe OF THOSE FOR EACH SLOT AND THE REST WILL BE THE CALCULATIONS THANK YOU*
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